Passionate about IP! Since June 2003 the IPKat has covered copyright, patent, trade mark, info-tech, privacy and confidentiality issues from a mainly UK and European perspective. The team is Neil J. Wilkof, Annsley Merelle Ward, Darren Smyth, Nicola Searle, Eleonora Rosati, David Brophy, Alberto Bellan and Merpel, with contributions from Mark Schweizer. You're welcome to read, post comments and participate. You can email the Kats here

From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Thursday, 31 March 2011

In "Minnow Microsoft v the Google Giant",posted on the BBC website today, Rory Cellan-Jones writes on the competition-based complaint lodged by Microsoft with the European Commission. He explains:

"It's a familiar story - a scrappy little underdog launches a competition complaint in Brussels about the giant that dominates its industry. Ten years ago it would have been Netscape accusing Microsoft of abusing its monopoly power - today it's Microsoft charging Google with the same crime.

Microsoft's first ever competition complaint is not just a wonderfully ironic turn of events, it's a measure of how the balance of power on the web has shifted. A decade ago control of the desktop and what applications lived on it was still all important - now it's the control of search which delivers huge power and billions of advertising dollars to Google.

... Microsoft is determined that its Bing search engine should make serious headway. In Europe at least, that's not happening. According to Microsoft, Google has 95% of the search market. Now it claims that Google is using its power unfairly to maintain that dominance. Its complaint - which as Google points out is just an addition to an existing antitrust case in which a Microsoft subsidiary was already a complainant - is that the search company is putting walls around content that rivals need if they are to compete.

In a long blog post, Microsoft's chief legal counsel Brad Smith outlines a series of areas where he says Google is impeding competition. He claims that it's very difficult, for example, for rivals to get proper access to YouTube - owned by Google - for their search results.

He points to the Google Books plan - blocked by a US court last week - as another case where any other search engine will get poor access to valuable content, in this case millions of books.

And he says that Google uses its business relationship with leading websites to block them from installing competing search boxes on their sites. ..."

This member of the IPKat team is not surprised. He has been telling his friends for the past four years that the only thing that can stop Google taking over the world, if people want to stop it doing so, is to focus on its crushingly powerful market position. It is effectively impossible for any other business to compete with the combination of forces -- Google Book, Chrome, YouYube, AdWord and AdSense -- which together will inexorably drive so much individualised information into its marketing and advertising facilities that no other electronic or printed media will be remotely able to provide value for the money advertisers are prepared to spend in marketing their goods and services.

Is there a solution? It has always been axiomatic in European competition terms that the existence of a dominant position in a marketplace is not harmful unless it is abusive, but Google is so ominpowerful and omnipresent, and is such an essential facility for all traders in all markets at all times, that there is no way to deal with it other than by breaking it up into lots of Baby Googles that will be forced to compete with one another, by analogy with the Baby Bells and Standard Oil.

Taking a stroll along the cyber-highway this afternoon, the IPKat chanced upon this little gem from the Curia website of the Court of Justice of the European Union:

"Disclaimer and warning

The texts and information contained in the Court's internet site are available free of charge for the purposes of public information.

The texts of the judgments, orders, Opinions and notices present on the site are subject to amendment; only the versions published in the "Reports of Cases before the Court of Justice and the Court of First Instance" or the "Official Journal of the European Union" are authentic [That is so unhelpful. It takes an astonishingly long time to turn a piece of text which is good enough to post online into a printed document. In last week's ruling of the ECJ in Case C-552/09 PFerrero the court referred to two of its earlier decisions, C-398/07 P and C-57/08 P, decided on 7 May 2009 and 11 December 2008 respectively -- and both still unreported].

The information and texts available on this site may be reproduced provided the source is acknowledged [How must this be acknowledged? Is a direct hyperlink sufficient, or is there a preferred format for online and printed reproductions?]. Readers should be aware that certain parts of such information and texts might be protected under intellectual property law, in particular by copyright [Readers should also be aware that the fact that accessed material may be protected by IPR, and in particular copyright, does not mean that any unauthorised use constitutes an infringement of any such rights].

Links to the pages on this site are permitted provided that:

- the browser window does not contain any information other than that of the page of the present site to which the link is made and its address; [The IPKat is happy to oblige, but Merpel can't help wondering as to what provisions of European Union or national law Curia might wish to evoke if this condition was not fulfilled]

- none of the information provided on this site is modified [Hmm, sniffs Merpel, it does say earlier that the site's contents are "subject to amendment", but it doesn't say by whom!]".

This member of the IPKat team lives in the present, and considers that life's too short to wait years and years for the printed versions of ECJ and General Court rulings. Since the courts themselves are content to rely on the non-authentic versions which they continue to cite, we shouldn't lose too much sleep over it either.

Merpel adds, material published in the Official Journal of the European Union might be authentic and only a month or two behind the actual rulings, but on the whole it's useless for any legal purposes. An example taken at random is the official and presumably authentic note of a General Court decision from 11 February 2011, published online in the Official Journal on 24 March here:

Other party to the proceedings before the Board of Appeal of OHIM, intervener before the General Court: Norma Lebensmittelfilialbetrieb GmbH & Co. KG (Nuremberg, Germany) (represented by: A. von Welser, lawyer)

Re:

Action brought against the decision of the First Board of Appeal of OHIM of 20 February 2009 (Case R 1879/2007-1), concerning opposition proceedings between Norma Lebensmittelfilialbetrieb GmbH & Co. KG and Yorma’s AG

Operative part of the judgment

The Court:

1. dismisses the action;

2. orders Yorma’s AG to pay the costs.

There's no clue as to what the basis for the decision is, yet it's that which might tempt someone to look at the decision in the first place. There's no link to the decision against which the appeal is made, and which will contain (i) the facts, (ii) the arguments and (iii) an illustration of the figurative mark -- all of which are more important for the reader than the padded pomposity of the defendant's full name ("Office for Harmonisation in the Internal Market (Trade Marks and Designs)") -- a name by which this Kat has never heard any of its employees refer to it in conversation.

It's 2011 and we're in a different world from 1952, when the Official Journal's most distant predecessor was first published -- yet series remains obstinately unchanged. Let's have some joined-up thinking between the Curia and the Commission as to what functionality its official publications should have, what its users' interests are, and what are the trade-offs when trying to achieve the right balance of speed, accessibility, reliability and that great proportionaliser, cost.

The Court of Justice of the European Union is being kept very busy by intellectual property matters these days. Today's batch of Curia posts includes the Advocate General's Opinion in Case C‑190/10Génesis Seguros Generales Sociedad Anónima de Seguros y Reaseguros (GENESIS) v Boys Toys SA and Administración del Estado, a reference for a preliminary ruling from Spain.

The question has been published in English:

"May Article 27 of Council Regulation ...40/94 ... on the Community trade mark be interpreted in such a way as to enable account to be taken not only of the day but also of the hour and minute of filing of an application for registration of a Community trade mark with OHIM (provided that such information has been recorded) for the purposes of establishing temporal priority over a national trade mark application filed on the same day, where the national legislation governing the registration of national trade marks considers the time of filing to be relevant?".

The AG's Opinion alas, is in a smattering of Euro-tongues, including Latvian -- but again not in English. The French version reads like this:

"In the current EU law, Article 27 of Regulation (EC) No 40/94 of 20 December 1993, the CTM, it does not take into account beyond the date of filing of the CTM, also an hour and minute of that deposit".

We get the message. Merpel adds, this was no easy question, it seems. The AG needed nearly 80 paragraphs and over 40 footnotes ...

Wednesday, 30 March 2011

Apart from the light-bulb symbolism
on the cover, this book has much
to commend it to the busy reader

The IPKat has been perusing the second edition of Essentials of Intellectual Property, by Alexander I. Poltorak and Paul J. Lerner (both of General Patent Corporation). Given the versatility and indeed the enthusiasm of the pair, it is unsurprising that the book's cover bears the subtitle 'Law, Economics and Strategy', these being but three of the many disciplines which the authors illuminate for the business reader (they can do algebra too, but 'Law, Economics, Strategy and Algebra' might be a bit too off-putting for the target readership).

Since this book has emerged nearly a decade after the first edition, it has been treated to a major update. Considering that the years since 2002 have seen such momentous activity -- the death or obsolescence of many classic business models, the rise of trollism, the combined opportunities and threats of the internet, the Doha dilution of pharma patent expectations, direction-changing Supreme Court rulings like eBay v MercExchange as well as shifts in legal and commercial perspectives resulting from Bilski and the current raft of litigation over false patent marking, to name but a few -- it would have been impossible to avoid a big rethink.

But whatever the changes, the things that remain the same have to be rammed into the reader's consciousness and it is the virtue of this book that it does just that. Go where the money is, be prepared to share in order to grow, check how much protection you need in order to fulfill your objectives, watch out for your own liability as well as that of others -- these are among the messages that the author transmit. For the record, this new edition includes

It's not a law textbook -- but it is a fun read and a very informative one. In the olden days this Kat would have taken it to read cover-to-cover on a long flight, but nowadays it takes so long to get through security that he could probably read most of it then. The algebra is near the end, so you can pretend it isn't there ...

Not a second edition this time but a third, and also not a moment too soon, is Intellectual Property Law in Ireland, crafted by a talented trio of the IPKat's friends -- distinguished academic Bob Clark, plus that amiable pair of practitioners from FRKelly, Shane Smyth & Niamh Hall.

Only six years after its predecessor, this edition has had to run very fast to keep up with events. The rapid unfolding of developments in the European Union and its Court of Justice, the Irish version of the "three stripes" saga and some bonny battles over fashion design have provided some of the reasons for this need. Anyway, according to the publisher's blurb,

"This is your single-source expert guide to intellectual property law. fully updated to the key changes that have taken place in this area of law since the publication of the 2nd Ed in 2005, together with all relevant case claw.

This unique book deals with intellectual property law in its entirety, providing a single, practical and all-embracing information source covering the main aspects of intellectual property law. The expert coverage includes copyright, trade marks, patents and design law".

The IPKat feels that the publishers could have done a bit better than this. They could have pointed out that there is an increasingly significant body of reported Irish IP law these days. They could have added that, while much of the past tense of Irish is made up of British precedents, and an even larger proportion of its future tense is European, Ireland is very much its own country with its own style and tempo of dispute resolution, its own approach to administration and official procedures, its own interpretative nuances, its own professions and its own domestic market. The authors have worked hard to provide a reference work which is readable, accessible and -- for the reader who frets over whether European norms of protection and enforcement are adequately implemented -- increasingly reassuring.

Wishing profoundly that he had been able to master any modern European language other than his own, ths member of the IPKat team draws the attention of his readers to Affaires C‑509/09 et C‑161/10eDate Advertising GmbH v X and Olivier Martinez et Robert Martinez v Société MGN Limited. The Advocate General of the Court of Justice of the European Union gave his Opinion this morning and the Kat thinks he might be sniffing at something with some degree of IP significance, since the words "copyright", "information", "right of personality" and "reputation" crop up. The AG recommends the Court to rule that

""(1) The term 'place where the harmful event occurred or may occur', as used in Article 5(3) of Regulation 44/2001 of 22 December 2000 , on jurisdiction, recognition and enforcement of judgments in civil and commercial matters must be interpreted, in case of infringement of personal rights through information disseminated in several Member States through Internet, in that the holder of the personality right may bring an action for damages

- The courts of the Member State governing the establishment of the publisher of the publication having violated the rights of personality, which are responsible for repairing all damages resulting from the breach those rights, or

- The courts of any Member State in which the publication was distributed and in which the holder the right personality says he suffered injury to his reputation, which have jurisdiction only damage in the Member State of court, or

- The courts of the Member State in which lies the "center of gravity of the conflict 'between the property and interests, which are thus responsible for repairing all damages resulting from the infringement of personality. Means the Member State in which lies the "center of gravity of the conflict", the one in which the information at issue is particularly relevant and objectively and where the copyright owner's personality also has the 'center of his interests '.

(2) Article 3 of Directive 2000/31/EC of the European Parliament and the Council of 8 June 2000 on certain legal aspects of information society, in particular electronic commerce, in the market procedure should be interpreted as meaning that it does not impose a rule of conflict of laws or a "patch on the bottom." [whose bottom, Merpel wonders? Her copy of the E-Commerce Directive makes no reference to backsides at all ...] That provision embodies the legislative harmonization of free services applied to electronic commerce, in the same time allowing the Member States, within the discretion conferred upon them by the Directive and Article 56 TFEU to provide measures to protect the interests worthy of a special guarantee, as an exception to the free provision of services".

In "Taking the PS3s ..." earlier this month the IPKat thought he had tidied up the loose ends, solved all the problems and removed all the speculation when he posted this item on the customs detention and subsewquent release of Sony Playstations, revealed that this was not the sordid bagging of a load of grubby counterfeits but the spin-off from a dispute concerning techical standards and the (non)availability of a Fair, Reasonable and Non-Discriminatory (FRAND) licence to use the Blu-Ray technology. But events have moved on since then, as the IPKat's friend Ruprecht Hermans (Brinkhof) explains:

"On Thursday 24 March the president of the The Hague Court issued a decision in writing in the preliminary injunction proceedings between LG Electronics and Sony ...
As you will recall, LG executed a civil seizure as well as obtained a customs measure to detain allegedly infringing Playstation 3s (“PS3s”) at the Dutch border. Almost 300,000 PS3s were seized and detained for allegedly infringing LG's patents relating to the Blu-ray disc technical standard. This standard is developed by the Blu-ray Disc Association (“BDA”), to which both LG and Sony belong. The patents are said to be essential, so a licence is needed if anyone wishes to manufacture products complying with the standard.

In his written decision the president now explains his earlier oral decision.

He gives important consideration to the by-laws of the BDA which provide that all members are obliged to grant licences under their essential patents on FRAND conditions to any interested party, including other members. Regarding the relationship between members Article 16 more in particular provides:

“(4) All Members, regardless of whether they ... join any established joint licensing program for the Essential Patents, agree that the aggregate of terms and conditions of all licences necessary under the Members’ Essential Patents shall not block, frustrate or harm acceptance of any Blu-ray Disc Format as a worldwide standard or development of products complying with any Blu-ray Disc Format or commercialization of the same.

(5) Any dispute between a Member and another Member over whether the Member is offering a licence under its Essential Patent(s) on fair, reasonable and non-discriminatory terms and conditions within the context of the provision of Article 16(4) shall be decided by a single neutral arbitrator appointed under the International Rules of the American Arbitration Association ... and will be conducted under the rules of that Association in New York City. The arbitration hearing shall take place no later than ninety days after the arbitrator is selected and a decision shall be rendered within thirty days of the completion of the hearing. In evaluating the reasonableness of the disputed terms and conditions, the Arbitrator shall take into account, among other things, terms and conditions (including but not limited to applicable licence fees) of joint licence programs and individual licence programs within the area of licensing essential patents for optical disc systems, where
(i) such terms and conditions and
(ii) such optical disc systems are generally accepted by the optical disc systems industry.”

From this and also from the general purpose of the by-laws it follows, according to the President, that the purpose of the by-laws is to commercialise the Blu-ray standard in favour of the members. This intention does not in principle fit with a situation whereby members fight each other with infringement actions:

“Such action is directly contrary to the wish to promote the use of the standard. Further, it is not unimportant that an injunction will also damage other members than the attacked party. If, for example, Sony because of an injunction cannot offer PS3 consoles, the consequence is not only that LG will not profit but that other members will also not receive royalties. Cooperation between the members is therefore solely advantageous if as many products as possible can be offered under the standard.”

According to the preliminary view of the president a relationship that is governed by the notions of “fair” and “reasonable” is irreconcilable with using the threat of injunctions and seizure as a negotiation tool.

The above makes this case different from Philips/SK Kassetten (a conflict between a member of a standard setting organisation and a third party, noted here on the excellent EPLaw).

If members cannot agree on licence terms, they are obliged to refer to the arbitration provided in the by-laws. This brings the president to the conclusion that the by-laws unavoidably lead to a licence between the relevant members and this is not reconcilable with a member taking actions which may lead to an injunction".

The IPKat says, if one assumes that LG and its legal advisers must have been aware both of the licence imperative and the arbitration provision, it seems quite astonishing that the Dutch Customs should have been asked to seize these PS3s at the border. Merpel wonders whether Dutch law provides any remedy for other patent licensors whose entitlement to royalties under the BDA scheme would be delayed or reduced by virtue of what appears at this distance to be LG's conspicuously wrongful action.

Fingered. Last week, in "Coming to their Sensis: of Aussies, scams and the Yellow Peril", the IPKat featured a reporton a successful, if stressful, attempt to drive a scammer off a URL which it should not have been occupying. He now thanks Nadine Courmadias (Legal Counsel, Sensis Pty Ltd) for telling him about the fake yellow page scammer's "inverted fingers" logo (reproduced, left). The Kat wonders if the new generation of Yellow Pages customers knows why there are any fingers in its logo at all; he seems to recall a slogan, from the distant past when we all used paper products, "Let your fingers do the walking".

Not on your Nellie? Never on a Monday! In "Search Yahoo! for Elly? Not on your Nellie" the IPKat reported on a dramatic decision from the Tribunale di Roma that an internet service provider could be a contributory copyright infringer where the use of its search engine led users to sites that provided infringing versions of the movie they were seeking. It now seems that the real drama wasn't in the courtroom but in the newspaper reports. As Gaetano Dimita explains: "I finally got my hands to a copy of the Yahoo! case. I found it on Interlex.it, here. The Italian newspaper reports were inaccurate. The action was a 'procedimento cautelare' (I think the proper translation is 'procedure for interlocutory remedies' or 'preliminary or summary judgment), not a full decision. No further reasoning will be produced. The judge, assessing the 'fumus boni juri' and the 'periculum in mora', ordered Yahoo! to remove the links to infringing websites. Yahoo! did have knowledge of the infringement as a result of notices sent by the plaintiff (PFA Film srl) and, since it did not activate its take-down procedure, it became liable. However, Google Italia and Microsoft (also parties in the proceedings) where not found liable since they did not administer their search engines directly and they were entitled to their costs".

Latest news on the battle between Louis Vuitton and Nadia Plesner (see earlier IPKat post,"Iconic IP and freedom of expression: the battle lies ahead", here, and Poll on the IPKat's side-bar), comes from Jens van den Brink (Kennedy Van der Laan), who acts for Ms Plesner. There will be a second hearing on the challenge to the appointment of the judge on 4 April, to enable the judge to react to additional grounds for the challenge. Also, a new hearing date for the injunction proceedings has been set: it's 20 April at 14:00 hours, in The Hague court.

Around the blogs. Congratulations are due to the IP Finance weblog which, founded in January 2008, has now notched up its 900th email subscriber. PatLit's 22nd PCC Page, "IPOff tells Cautious: “Get knotted"", can be found here, continuing the saga of cut-price, sawn-off litigation in the Patents County Court for England and Wales. MARQUES Class 46 reports that there are still three or four places available on the "Future Plans" seminar on trade marks in Europe next week.

Casting for a star role
in the Opposition Division ...

Movie buffs take note! A YouTube video which a group of Office for Harmonisation in the Internal Market (OHIM) staff developed in order to explain the benefits of Community trade mark protection to a general audience. The project was supported by OHIM's multimedia team, but the script was developed and "acted" by volunteers drawn from various OHIM departments. Further information is available from OHIM here. You can also view the movie here.

I am doing some writing for a chapter in a to-be-published collection to which I hope to contribute. I can't spill too many of the proverbial beans about the contents of the chapter. I can share, however, one point that I am exploring, namely whether there is any place for the notion of "legal fictions" in IP law. Let's consider the following definition of "legal fiction", taken from an article published over 20 years by Professor Eben Moglen of Columbia University (and one of the high priests of the free software movement). Writing in "In Legal Fictions and Common Law Legal Theory Some Historical Reflections" (Tel-Aviv University Studies in Law 1989) here, Moglen stated as follows:

"A legal fiction is a proposition about the substance or procedure of the legal system, purporting to be a principle or rule material to the determination of cases, which rests in whole or in part on factual premises known to be inaccurate at the time of the fiction's invocation. Each fiction, qua fiction, may be said to have a subject matter, comprised of the premise or premises counterfactually maintained. Fictions may have as their subject matter the parties' status or prior transactions in the case before the court; or the existence or relationship of third parties, places, or things not before the court; or they may assert facts about the tribunal, or about the history of the law itself. ... In addition to its subject matter, the fiction as fiction may be said to have the additional attribute of technique, or the device by which the counterfactual is declared. The simplest technique is assertion: the truth of the subject matter is announced without more, or having been asserted by a party is adopted by the court without scrutiny."

Breaking down the elements of Moglen's definition, we have the following:

1. A rule or principle material in the determination of a case;
2. Subject matter that is known to be inaccurate (i.e., maintaining a counterfactual proposition as being true).
3. A mere assertion, otherwise unproven, about the truth of the counterfactual.

As for the purpose of legal fictions, several Canadian judicial pronouncements are instructive:

1. "A legal fiction ... is an assumption of a possible thing as a fact, which is not literally true, for the advancement of justice, and which the law will not allow to be disproved, as far as concerns the purpose for which the assumption is made." Justice Lennox, Stoner v. Skene (44 Ontario Law Reports, , 1918).
2. "[l]egal fiction is an assertion accepted as true (though probably fictitious) to achieve a useful purpose, especially in legal matters." Staufen v. BC 2001 BCSC 779.

Or, in more down to earth language, a legal fiction is a "dirty little factual secret" used to achieve some presumed useful purpose or goal. Keeping in mind that Moglen fashioned his definition in the context of the common law, I wonder whether we can identify any legal fictions in the IP world. The trick here is to find some IP counterfactual; the technique of assertion seems to follow rather easily.

Let me float one IP candidate for a legal fiction, a trade mark co-existence agreement. Such agreements are entered into to resolve an actual or potential conflict between two competing marks. The problem is that such agrements typically declare there is no confusion, or even likelihood of confusion, even if the underlying premise giving rise to the agreement is the existence of confusion. As for a valuable social purpose, I suppose that one can make an argument that such settlements, unless they are a camouflaged vehicle for anticompetitive behaviour, are desirable, especially when the alternative is continued contentious proceedings in either the courts or before the trade mark registry.

Tuesday, 29 March 2011

It has been rumoured that Mr Justice Arnold has produced some judgments which contain fewer than 100 paragraphs. Some have even heard tell of one mythical judgment in which the paragraph count struggled majestically but was finally laid to rest within a hair’s breadth of single digits. Naysayers dismiss this fable as nothing but stuff and nonsense: quality, they say, takes time. And space. And words. Lots of words. But still the rumours persist: whispers around the hearthside, hushed conversations in ale-houses, and meek utterances made through the froth of lattes and macchiatos consumed on the Strand. Sometimes a quiet murmur of the word “probate” can be heard to accompany the tale. No one knows why.

The decision in Servier v Apotex [2011] EWHC 730 (Pat) handed down this morning is not one of these fabled decisions, close though it is to nudging under the triple-digit paragraph line. Statisticians amongst you will be delighted to hear that the page count is 34 and the paragraph count a little under 120. At only 17,000 words, however, it falls to be classified as a 4.0 on the Arnold scale.

The issue before the court on this particular occasion is not really IP-centric as such, although it does arise in the context of an IP dispute. It therefore enters this blog through a back door replete with false moustache (whether that is the door, or the decision, is unimportant for present purposes).

First, however, the background: Servier is (and has been) the proprietor of a number of patents (some expired) on various formulations of perindopril erbumine and its derivatives and processes for its manufacture. Perindopril erbumine is a long-acting ACE (Angiotensin-Converting Enzyme) inhibitor used for treating hypertension and cardiac insufficiency. In July 2000, Servier filed priority applications for three patents each of which covered one of the three crystalline forms of perindopril erbumine (α, β and γ) which had been discovered. The patent for the α form (European Patent No. 1 296 947 – “the Patent”) serves as the basis for the current dispute.

The Patent was granted on 4 February 2004, and was the subject of opposition by 10 opponents, not including Apotex. Initially, the Opposition division of the European Patent Office decided to maintain the patent, but by a decision of the Technical Board of Appeal dated 6 May 2009 (T_1753/06) it was eventually revoked. The eagle-eyed amongst you will have noted that this left a 5-year window within which the patent was apparently valid when, in fact, it was not. Needless to say, things happened within this window that led to the dispute in hand.

In March 2006, Apotex informed Servier that it intended to start marketing generic perindopril erbumine in the UK – the relevant material having been manufactured by Apotex in Canada. It received marketing authorisations in July 2006, and between 28 July (for the curious: a Friday) and 3 August (a Thursday) that year it made sales worth over £4.1 million. On 1 August 2006, Servier commenced proceedings against Apotex and on 2 August they applied, without notice, for an interim injunction to restrain Apotex from marketing the product. This was denied by Mann J so a renewed application on notice was made the following day, which was successful. A short-term injunction was granted until a hearing on 7 August 2006, following which Mann J granted an interim injunction until trial – reasons for which were contained in his judgment ([2006] EWHC 2137 (Pat)), dated 8 August 2006.

Both the original (3 August) and later (8 August) orders contained a cross-undertaking in damages by Servier in the following form:

“If the Court later finds that this Order has caused loss to the Defendants, which shall include Apotex UK Limited, and decides that the Defendants should be compensated for that loss, the Claimants will comply with any Order the Court may make.”

Thereafter, Pumfrey J held ([2007] EWHC 1538 (Pat)) that Apotex had infringed the Patent, but that it was invalid. The Court of Appeal ([2008] EWCA Civ 445) upheld this finding of invalidity, describing it (at [9]) as “the sort of patent which can give the patent system a bad name”. The cross-undertaking was therefore thrust into play.

To complicate matters, Servier had also been pursuing Apotex in Canada (where the perindopril erbumine sold in the UK before the injunction had been manufactured). The Canadian Federal Court of Appeal (CFCA) had affirmed that the Canadian patent was valid and infringed ([2009] FCA 222), leave to appeal to the Supreme Court of Canada was denied at the end of March 2010.

Ex Turpi Causa Non Oritur ActioCutting out some of the wrangles that occurred between the CFCA’s decision and the present episode in this dispute, the question before Arnold J was whether Apotex should, as a matter of public policy, be allowed to recover damages for being prevented from selling a material whose manufacture would have been unlawful because it infringed a valid foreign patent. As the Judge explains (at [41]), this “is an application of the rule of law identified by the Latin maxim ex turpi causa non oritur actio (no action can arise from an illegal or immoral act), also known as the illegality defence.”

Apotex claimed that it should be able to recover these damages as: (1) the ex turpi causa rule only applies where the act in question is either a criminal offence or involves moral turpitude amounting to dishonesty, and that patent infringement is neither of these; (2) that the rule only applies where the claimant’s claim relies to a substantial extent on the illegal or immoral act, which Apotex did not do; and (3) that the rule cannot be invoked where an unqualified cross-undertaking in damages has been given (as here) because that amounts to approbating and reprobating.

Apotex’s First ClaimTaking these points in turn, Arnold J embarked upon a characteristically comprehensive, thorough and moreover engaging tour of the cases, noting in relation to Apotex’s first point that:

[92] “The main conclusion which I draw from this survey of the cases cited to me is that they confirm that the application of the ex turpi causa rule depends on the circumstances of the case. Significant factors include the knowledge of the claimant at the relevant time, whether the illegality involved intentional or negligent conduct on the part of the claimant and whether the commission of the illegal act was induced by the defendant. It appears from dicta in a number of these cases that it may not be sufficient that the act was criminal if the offence was one of strict liability and the claimant was unaware of the relevant facts. Equally, mere negligence is unlikely to be enough in the circumstances of a claim for contribution or indemnity against another tortfeasor.”

However, none of the authorities cited assisted Apotex in substantiating its first point. Mr Justice Arnold noted that it was important to bear in mind that the real issue in this case was the exercise of the court’s “equitable jurisdiction to enforce a cross-undertaking in damages”. Therefore, the fact that the court has “discretion to refuse to order an inquiry casts lights on the nature of the jurisdiction. The court is concerned to do what is just having regard not only to the fact that the injunction was wrongly granted, but also to wider considerations.”

“…the court will not award compensation under a cross-undertaking for the loss sustained by an unlawful business or where the beneficiary of the cross-undertaking has to rely to a substantial extent upon his own illegality in order to establish the loss. As a matter of international comity, it does not matter for this purpose whether the acts in question are unlawful under English law or under foreign law.”

He added that the unlawfulness in question must be “sufficiently serious to engage the ex turpi causa rule”, and that “the unlawfulness must be personal to the claimant, not vicarious.” Whether unlawfulness is “sufficiently serious” would depend on the “circumstances of the case, and in particular the state of knowledge of the claimant under the cross-undertaking at the relevant time”.

On the facts before him, Arnold J was of the opinion that Apotex’s claim involved sufficiently serious unlawfulness to engage the rule. Apotex, he said, was not misled by Servier in any way, neither was its unlawful act induced by Servier. Apotex was also aware of all the material facts – indeed the Canadian first instance decision had found as a matter of fact that Apotex knew that making perindopril erbumine would infringe the Canadian patent if valid. Moreover, Apotex committed the infringing acts intentionally. The final nail in this particular argument was however provided by the fact that there was “precise symmetry between Apotex’s claim for compensation under the cross-undertakings and the illegality upon which Servier relies”, adding rhetorically:

[100] “…Why should Apotex be permitted to claim compensation for being wrongly prevented from infringing one patent on the basis that, but for the injunctions, it would have infringed another patent belonging to the group of companies?”

Apotex’s Second ClaimIn his earlier judgment in Lilly v 8PM, Arnold J had held that the ex turpi causa rule applied where the beneficiary of the cross-undertaking has to rely to a substantial extent upon his own illegality in order to establish the loss claimed. According to the judge:

[104] “Apotex’s claim is predicated upon manufacture of perindopril erbumine in Canada at low cost, export of the tablets to the United Kingdom and sale of those tablets in the United Kingdom at a profit. It is true that the importation and sale of the tablets in the United Kingdom was perfectly lawful, but those acts were not sufficient to produce the profits which Apotex claims to have lost. The profits depend on Apotex manufacturing the product in, and exporting it from, Canada, which would have [been] unlawful. It follows that Apotex does have to rely upon its own illegality to a substantial extent to establish the loss claimed. To use the language used in a number of the cases, Apotex’s claim is founded upon its own unlawful acts.”

This put paid to Apotex’s second point.

Apotex’s Third ClaimIn relation to the third point concerning approbation and reprobation, the Judge was similarly unimpressed. To begin, Arnold J did not accept that Servier’s cross-undertakings were unqualified. Second, even if they had been qualified in the manner that had been suggested by Apotex as appropriate (i.e. if they were subject to a qualification or proviso that the undertakings would not apply to losses sustained by Apotex as a result of acts which were subsequently held by the Canadian courts to infringe the Canadian Patent), then this have had “no effect on the exercise of … discretion to grant the injunctions.” “The same policy considerations which underlie the ex turpi causa rule would lead to the conclusion that such losses should not weigh in the balance when deciding whether or not to grant an interim injunction.” [115]

Accordingly, Apotex’s claim was held to be barred by the ex turpi causa rule.

It’s been a long day. But I've learned things. I’m off for a macchiato…

There are days when it rains and, for a Kat at least, others when it paws… Today is definitely one of the latter. In an avalanche of activity, the Court of Appeal has handed down a trio of IP judgments this morning. First on this Kat’s platter for the day is the decision in Schütz v Werit [2011] EWCA Civ 303.

Schütz is the exclusive licensee of a European Patent (EP (UK) 0 734 947) belonging to Protechna. The patent is for an intermediate bulk container (IBC). As Jacob LJ explains: “An IBC is a large (about 1000 litres, so about a metric tonne or more) container used for the transport of liquids. They have to be able to withstand the tough conditions of transport – they must be leak proof, capable of being stacked in threes or fours (so the bottom one may have about 6 tonnes on it), capable of withstanding prolonged or violent vibration and withstanding the forces caused by the liquid within sloshing around.”

Prior to the patent, IBCs of a two-part construction (basically a plastic bottle within a metal cage) were well-known. Due to the generally tough conditions of transport and the inherent differences in durability between plastics and metals, the average lifespan of the cage is some five times that of the bottle that it holds. Consequently, an industry has developed to repair any damage to the cases and to refresh the containers themselves by “re-bottling” (i.e. replacing the old bottle with a new one from the same manufacturer) or “cross-bottling” (i.e. replacing the old bottle with one from a different source). Schütz objects to its cages being used by cross-bottlers, which, as you might expect, is the root of this dispute.

As the Court explains:

[10] “Werit sells bottles for IBCs to a company called Delta, a reconditioner. Delta buys discarded Schütz IBCs, removes and discards the original Schütz bottles, makes any necessary repairs to the cage, replaces them with Werit bottles and offers the resulting IBC to the market in competition with Schütz.”

Schütz originally brought an action for infringement against Werit, as is their right pursuant to s67 of the Patents Act 1977, it being common ground that if Delta infringed the Patent by their reconditioning then so also did Werit. Werit did as any alleged infringer would do and counterclaimed for invalidity. Protechna were formally parties to the proceedings, but took no active part therein – and so for the purposes of this note can conveniently be forgotten. At First instance ([2010] EWHC 660 (Pat)), Floyd J found the patent valid but not infringed. Both Schütz and Werit appealed against the findings that they did not agree with, and the case arrived before the Court of Appeal.

Before the Court, three issues remained live: (a) whether the patent was invalid for insufficiency or was so ambiguous that it could not be infringed; (b) whether the Patent was invalid for added subject matter; and (c) whether, if valid, what Delta does amounted to an infringement within the meaning of s60(1) PA 1977 – in other words, was Delta “making” the patented article?

The first two points are described by Jacob LJ as having “no general importance”, the real focus of the appeal being issue (c). To cut a long story short, the patent was found to be valid and so the Court turned to the main point of contention: “making”.

Making
The patent claimed an IBC consisting of three items: a pallet, a bottle, and a cage. The cage was considered to be the novel and inventive bit – to which the bottle and pallet add nothing of interest, save that the bottle is “exchangeable” and co-operates with the frame. This interaction between frame and bottle provided the IBC with its strength and stability. The question before the Court was therefore whether when Delta puts a Werit bottle into a Schütz cage it infringes the Patent.

(As a brief aside: the background to the drafting of the PA 1977 is well known, as is Jacob LJ’s wonderment at the lengths that were taken to turn the perfectly serviceable wording of the various International Conventions upon which certain provisions of the Act were based into anglicised shadows of their former selves. Fans of such comments will accordingly not be displeased with [36] to [39] of this judgment.)

However, back to making: the starting point for the discussion of “making” was considered to be Art 25 CPC, which, in turn, brought in Article 69 EPC, as the “extent of protection is determined by the claims.” The only question before the Court was therefore whether the act of putting a bottle into a Schütz cage constituted “making a product which is the subject-matter of a patent”.

With this point sorted, Jacob LJ then dived headlong into an analysis of United Wire v Screen Repair Services [2001] RPC 24, noting that this had been the main battleground of the parties in this case. The crux of the dispute was whether United Wire established (or indeed prohibited) a “whole inventive concept” test for the determination of whether there had been “making”. If such a test had been adopted, then it was argued that, as the cage embodied the whole of the inventive concept of the claimed invention, anyone putting a new bottle into an existing cage could not be said to be “making” the patented article.

In particular, the parties disputed the meaning to be attributed to the following excerpt from Aldous LJ’s judgment in United Wire in the Court of Appeal:

[25] “It is therefore better to consider whether the acts of a defendant amount to manufacture of the product rather than whether they can be called repair, particularly as what could be said to be repair can depend upon the perception of the person answering the question. Even so, when deciding whether there has been manufacture of the product of the invention, it will be necessary to take into account the nature of the invention as claimed and what was done by the defendant.”

Schütz argued that Aldous LJ was saying that what mattered was whether the defendant was making the patented article. Werit, on the other hand, considered that the final sentence was by implication bringing in the Judge’s “whole of the inventive concept” test. The distinction mattered as the House of Lords had explicitly endorsed Aldous LJ’s judgment in the case as correct.

Jacob LJ considered that Aldous LJ could not have been adopting a “whole inventive concept” test. To have done so would have rendered it impossible to subsequently hold (at [29] of United Wire) that it was an infringement for Screen Repair Services to recondition or repair a frame made by United Wire and re-use it to make an assembly as claimed in claim 1 of that patent. This was because (as explained at [54] of the Schütz decision) in the case of one of the patents alleged to be infringed in United Wire the inventive concept resided solely in the use of a flexible frame. Adopting a “whole inventive concept” test would have meant that when Screen Repair Services sandblasted and re-meshed this frame they would not have infringed, having not made the invention afresh.

Turning, then, to the House of Lords’ decision, Jacob LJ noted that Lord Hoffmann explicitly endorsed the Court of Appeal’s approach in the case. Moreover, his Lordship had explained that “whilst “repair” might as a matter of acontextual language overlap with “making” it could not do so for the purposes of s.60(1)(a) (i.e. Art. 25).” The important thing was to identify the patented product. In the instant case the product was the IBC. This ceased to exist when the bottle was removed. What remained at this stage was, according to Jacob LJ, “merely an important component from which a new IBC could be made.”

Accordingly, Jacob LJ considered that the House of Lords in United Wire had excluded the “whole inventive concept” test. The only question of importance was whether the alleged infringer had made the patented product. Here Delta had done just that when they replaced Schütz’s bottles with those manufactured by Werit.

The Court of Appeal also considered that there were additional reasons for rejecting the “whole inventive concept” test, notably that in practice it is likely to be fuzzy and uncertain:

[72] “…How precisely do you ascertain it? Take this very case. The cage co-operates with the bottle in the complete IBC. It is the combination of both which is claimed. So what is the whole inventive concept? Just the cage? Or the combination?
…
[76] “Another way in which the test is uncertain is that it would depend on what piece of prior art you took into account. For in a general sort of way the “inventive concept” is the difference between the patented idea and the old idea. That depends on what the old idea was.”

Furthermore, Canon v Green Cartridge [1997] AC 728 was considered to address one of the Judge at first instance’s concerns in the present case – the fact that if there was infringement Schütz would, as a commercial matter, have a monopoly in unpatented replacement bottles for their cages. Jacob LJ considered (at [79]) that this was “not really an apt matter for patent law”:

[80] “Does it really matter if Schütz has a monopoly in replacing bottles for its cages? One cannot really say whether there is any public interest in the nature of freedom of competition seriously involved. If anything it would seem not. Schütz’s actual customers would appear to be largely indifferent concerning the activities complained of. They simply want the used IBCs off their premises. They are not people who want their IBCs “repaired.””

The Judge at first instance had also considered (at [196] of that decision) a hypothetical patent on an inventive tennis racquet frame, with claims calling for a strung racquet coupled to the inventive frame. He asked: “Does this prevent re-stringing, even though the invention is said to lie in the features of the frame alone?”. Again, Jacob LJ considered that this was not an important consideration:

[90] "It is not necessary for us to provide any general answer to the “restringing problem”. It suffices to say that Delta, when it fits Werit bottles into Schütz cages, is making IBCs which fall within the Patent and are doing so without the licence of Schütz. That they themselves on their own website say they are “re-manufacturing” says it all."

We have another A and B situation today, but this time it's not Anheuser-Busch and Budvar. Back in November Mr Justice Floyd gave judgment in Football Dataco Ltd, The Scottish Premier League Limited, The Scottish Football League Limited and PA Sport UK Limited v Sportradar GmbH & and Sportradar AG[2010] EWHC 2911 (Ch), Chancery Division, England and Wales. In this action the claimants ("FDC") exploited certain data relating to English and Scottish football matches. This data, which was compiled in a database known as "Football Live", included goals scored, goal-scorers, penalties, yellow and red cards and substitutions; it was both updated and provided to third parties while matches were actually taking place. The defendants, Sportradar (a German company and its Swiss parent) assembled data relating to live English and Scottish football matches from public sources and called it "Sports Live Data". Their data was stored on webservers in Germany and Austria but could be accessed via links from elsewhere, including the United Kingdom. FDC sued, alleging infringement of their UK copyright and database right. Sportradar denied liability since, whatever they might be doing, they weren't doing it in the UK; nor were they domiciled in the UK. The courts of England and Wales therefore had no jurisdiction. The German Sportsradar then sued FDC in Germany in July, seeking negative declarations that its activities did not infringe any of FDC's IP rights.

FDC then applied to amend their Particulars of Claim in order to clarify the nature of the acts which they alleged to constitute infringements and also to add some new ones.

Floyd J started by warning that it was important to examine with some care what, if any, claims were made in the original Particulars of Claim. This was because Sportradar argued that, by virtue of its application for declarations of non-infringement, the German Court was first seized of any claim which the English Court was not properly seized of before July. That exercise had to be carried out without the benefit of the amendments for which permission had not yet been granted. Jurisdiction with regard to the German company was governed by the EU's Judgments Regulation and, in the case of the [non-EU] Swiss company, by the Lugano convention.

Could FDC show a "good arguable case" of UK copyright and/or database right infringement in order to establish jurisdiction in the UK? On the basis of the evidence, Floyd J said "no": Sportradar had not done any act of reproduction (in respect of copyright) or extraction (in respect of database rights) in the UK. As for re-utilization in respect of database right, Article 7(2)(b) of the Database Directive stipulated that
Any form of making available to the public all or a substantial part of the contents of a database by the distribution of copies by renting, by on-line or other forms of transmission. This raised a question of law of where the act of "making available" occurred. The issue was closely related if not identical to an issue raised on the amendment application of where "making available" occurred for the purpose of section 20 of the Copyright Designs and Patents Act 1988. He had to face this issue since, where a question of whether the Court has jurisdiction turns on a pure question of law, that question has to be decided.

Referring by way of analogy to the debate as to where a "broadcast" occurred (was it at the place of transmission or also at the place of receipt?) he pointed to the Satellite Broadcasting and Cable Re-transmission for broadcasts orginating within the EU. Under that directive, a broadcast occurs where the signals are introduced under the control of the person making the broadcast into an uninterrupted chain of communication (the "emission theory"). Said Sportradar, the emission theory should equally apply to the making available right and to re-utilization, since the act which statute deems to be the infringement is a "making available" and the public do not have to actually access the database to infringe. The judge agreed: that right would prevent transmission or re-transmission in a state to which the Directive applies and other restricted acts would prevent further use of the database within the state of reception. He said:

"... the better view is that the act of making available to the public by online transmission is committed and committed only where the transmission takes place. It is true that the placing of data on a server in one state can make the data available to the public of another state but that does not mean that the party who has made the data available has committed the act of making available by transmission in the State of reception. I consider that the better construction of the provisions is that the act only occurs in the state of transmission".

Though the point was not acte clair, Floyd J felt that he could still rule on it and therefore decided not to refer the point to the Court of Justice of the European Union (ECJ), particularly since the issue was not determinative of whether the court had jurisdiction at all. This was because he interpreted the Particulars of Claim as alleging acts of reproduction and extraction by Sportradar's end users in the UK who downloaded the data from the their servers. Although the customers/end users were not party to the proceedings, the pleadings alleged that Sportradar had authorised and/or was jointly liable for, the acts of the end users/consumers. On this basis, the English court had jurisdiction to rule on whether Sportradar had authorised, or was jointly liable for, the acts of reproduction, extraction and re-utilisation of a substantial part of the Football Live database.

Turning then to FDC's application to amend its application, he felt that he could not allow any amendment which raised a new cause of action if it was already within the scope of the German proceedings. He therefore allowed the amendments which gave further particulars of joint tortfeasorship by Sportradar and which pleaded communication to the public by its customers -- but not an amendment alleging making available by Sportradar itself under the Copyright Designs and Patents Act 1988, section 20.

Today the Court of Appeal (Lords Justices Laws, Jacob and Wilson) [2011] EWCA Civ 330,hearing the appeal and cross-appeal, decided to refer the following questions to the ECJ for a preliminary ruling:

"Where a party uploads data from a database protected by sui generis right under Directive 96/9/EC ("the Database Directive") onto that party's webserver located in member state A and in response to requests from a user in another member state B the webserver sends such data to the user's computer so that the data is stored in the memory of that computer and displayed on its screen
(a) is the act of sending the data an act of "extraction" or "re-utilisation" by that party?
(b) does any act of extraction and/or re-utilisation by that party occur
(i) in A only
(ii) in B only; or
(iii) in both A and B?".

In making this reference, and before reviewing the parties' arguments, the Court summarised the position thus, at paragraphs 42 to 45:

"42. In the case of the UK database right, the claimants say that this means making available to the UK public. That they say the defendants do by copying (re-utilizing) Football Live on their Austrian server and transmitting the copied data to those members of the UK public who click on "live scores". "Transmission," they say, in the case of provision of data over the internet or indeed otherwise by wire involves both the acts of hosting the website (Austria and Holland in this case) but also the act of the user in accessing it. It is not transmitted unless and until it is received. Before there can in reality be a transmission there must be a transmittor and a transmittee. This I will call the "transmission theory" or the "communication theory".

43. The defendants say not so, that acts of "transmission" occur only in the place from which the data emanates. This was called the "emission theory." The Judge thought that the "better view" was that the defendants were right about that though it was not acte clair.

44. Before us the parties deployed considerable arguments in support of their respective positions. Mr Mellor contended that the argument was so strong in the claimants' favour to be acte clair. After we had heard him we were not satisfied of this. Mr Carr did not dispute that position or that the point was important and could be decisive. He did not, therefore, oppose a reference to the CJEU.

45. We decided it was not appropriate for us to form our own view about this very important and difficult question".

In consequence of this reference, the part of FDC's action relating to direct liability for sui generis database right infringement must necessarily be stayed -- but the part relating to joint-tortfeasorship by unlawful communication to the public can proceed merrily on its way.

Addendum: in his haste to get this post up-and-running, the Kat left out the bit about infringement of copyright in an original database (in contrast with infringement of the sui generis database right), so Merpel is adding it now. At paragraphs 14 to 18 Jacob LJ killed any suggestion that there was such an infringement on the facts before the court:

"14. I turn first to the copyright claim. The criteria for subsistence of copyright in a database are that "by reason of the selection or arrangement of their contents, it constitutes the author's own intellectual creation". The defendants contend that the data collected by the claimants' agents is not of that sort – it involves no intellectual creation. Therefore, they submit, there is no copyright right at all. Alternatively, they submit, the data alleged to have been copied (namely goals, goalscorers, own goals, penalties, yellow and red cards and substitutions) are matters of pure fact. Such data is merely the contents of the alleged copyright and is precluded from protection by way of copyright by virtue of Art. 3.2.

15. I accept the latter submission. The Judge was obviously sympathetic to it (and to the attack on copyright subsistence as a whole) for he said:

[49] Paragraph 22 of the particulars of claim alleges that the compilation of Football Live involves "considerable skill, effort and/or intellectual input by experienced personnel to generate, select and/or arrange its contents". There is also an allegation that a substantial part has been used: see paragraph 37. In the light of the law as stated above, those combined allegations must include the allegation that what is taken is a substantial part of the intellectual input of the authors. Those allegations are supported by a statement of truth from each claimant. Mr Cuddigan's argument that the part alleged to have been reproduced by his clients does not amount to an intellectual creation is not supported by any evidence. Whilst the court might have a view based on its own impressions, I do not think that it would be right to place those ahead of what is properly in evidence. In those circumstances, whilst there may ultimately prove to be force in the argument, I think the claimants have a good arguable case on this issue.

16. Unlike the Judge I think the point can be dealt with now. The statement of truth really adds nothing. It may be that some of the information collected for the claimants includes matter which involves intellectual creation. So there may be copyright in Football Live. But what is alleged to have been copied is mere data on any reasonable view. Its recording may sometimes involve some skill (who scored in a goalmouth scramble) but it is not creative skill.

17. Nor, speaking more technically, do I think it matters that there is no evidence saying that the matter taken does not amount to intellectual creation. For I cannot imagine any credible evidence to the effect that it does. And actually, although the particulars of claim are supported by a statement of truth (so are a sort of evidence) there is no assertion that what was taken amounted to the taking of work involving intellectual creation.

18. It follows that when the proceedings started the court was not seized of a claim in copyright to the necessary standard. From that it follows that the argument we heard about "authorising" an act restricted by copyright (which by s.16(2) of the Act constitutes an infringement) becomes irrelevant. I say no more about it other than I saw considerable force in it.".

"Where there's life ... there's Bud" --
but who, or what, is Bud in Europe?

Every few weeks there seems to be another giant-sized decision in the Battle of the Buds -- and here's the next installment: Case C 96/09 PAnheuser-Busch, Inc. v Budějovický Budvar, a ruling of the Court of Justice of the European Union (ECJ), delivered dew-fresh and delicious all the way from Luxembourg.

In this particular version of the battle of the two breweries for the heart and soul of Budweiser beer, Anheuser-Busch applied to register four Community trade marks (CTMs). The first was a figurative mark featuring the word Bud for goods in Classes 16, 21, 25 and 32. The other three applications were in respect of the word mark Bud, in Classes 32 (beers), 33 (alcoholic beverages), 35 (setting up databases, gathering data and information in databases), 38 (telecommunications, ie making available and supplying data and information, supplying and communicating information stored in databases), 41 (education, entertainment) and 42 (restaurant, bar and pub services; operating a database).

Budvar opposed, citing the following alleged prior rights: (i) a figurative Bud mark effective for ‘all types of light and dark beer’, in Austria, Benelux and Italy; (ii) the appellation of origin ‘Bud’, registered under the Lisbon Agreement in respect of beer, and effective in France, Italy and Portugal; (iii) an Austrian appellation of origin ‘Bud’ protected in Austria under a bilateral convention with the former state of Czechoslovakia.
The Opposition Division partially upheld Budvar’s opposition, in respect of ‘restaurant, bar and pub services’ covered by Anheuser-Busch’s fourth application. All other grounds of opposition were dismissed. The Opposition Division considered that Budvar had proved that it had a right to the appellation of origin ‘Bud’ in France, Italy and Portugal, though in relation to Italy and Portugal the arguments put forward by Budvar were not sufficiently specific to determine the scope of its protection under national law. It found that the ‘restaurant, bar and pub services’ covered by one of the applications were similar to the ‘beer’ covered by the appellation of origin ‘Bud’, there being a likelihood of confusion given that the signs concerned were identical. However, in respect of the other goods, and in the context of the applicable French law, Budvar had failed to demonstrate how the use of the mark applied for was likely to weaken or undermine the reputation of the appellation of origin concerned, when the goods covered were different.

Both parties appealed. The Board of Appeal dismissed all Budvar’s appeals but allowed that of Anheuser-Busch. It considered that Budvar no longer appeared to refer to its international figurative mark as the basis of its opposition, but solely to the appellation of origin ‘Bud’. It was however difficult to see how ‘Bud’ could be considered to be an appellation (or designation) of origin, or even an indirect indication of geographical origin. The Board also held that the evidence provided by Budvar to show use of the appellation of origin ‘Bud’ in Austria, France, Italy and Portugal was insufficient. Thirdly, it held that Budvar had not demonstrated that the appellation of origin gave it the right to prohibit use of the word ‘Bud’ as a trade mark in Austria or France.
Budvar appealed to the Court of First Instance (now the General Court), contending that (i) the sign BUD could be considered to be an appellation of origin, and (ii) the conditions of Article 8(4) of Regulation 40/94, in relation to an opposition based on the existence of an earlier non-registered mark of more than purely local significance, were satisfied. The Court of First Instance allowed the appeal.

In reaching its decision the Court of First Instance found that ‘Bud’ could be considered to be an appellation of origin and that it was protected under the Lisbon Agreement, and that the validity of a national mark may not be called into question in proceedings for registration of a CTM: when the contested decisions were adopted, the effects of the appellation of origin ‘Bud’ had not been declared invalid in France by a decision against which there was no appeal. Accordingly the Board of Appeal did not have the power to call into question the fact that the claimed earlier right was an appellation of origin. At most it could have suspended the opposition proceedings until a final judgment on the matter was delivered. The Court also found that the appellation ‘Bud’ remained protected under the bilateral convention, was still effective following the break-up of the Czechoslovak Socialist Republic.

The Court then upheld Budvar’s appeal in relation to the use in the course of trade of a sign of more than mere local significance. The Board of Appeal was wrong in law to apply, by analogy, the provisions of Community law relating to the ‘genuine’ use of an earlier trade mark. In the present context, an opposing party need only show that a sign had been used in the context of a commercial activity with a view to economic advantage. Subject to this, an appellation of origin registered under the Lisbon Agreement could not be deemed to have become generic. In any event, such appellations might enjoy protection in a particular territory even though they are only used in another territory.

On the facts, the Court held, Budvar had provided proof that the signs concerned were used in the course of trade and it was unnecessary to show that the signs were used prior to the contested CTM applications. At most, Budvar only had to show that the signs were used before publication of the trade mark applications in the Community Trade Marks Bulletin. The documents Budvar relied on were sufficient proof of use of the word ‘Bud’ even though they referred to a product on which the word ‘Bud’ was always accompanied by ‘strong’ or ‘super strong’.

In the context of an opposition based on the use in the course of trade of a sign of more than mere local significance, the Court held that it was sufficient for the sign to be used in the course of trade: the fact that it was identical to a trade mark did not mean that it was not used in the course of trade. Moreover, OHIM and Anheuser-Busch did not clearly specify how the sign ‘Bud’ had been used ‘as a trade mark’. There was no evidence that the expression ‘Bud’, displayed on the goods in question, referred to the commercial origin of the products more than to its geographical origin.

The word ‘significance’ in the formula “more than mere local significance” referred to the geographical extent of a sign’s protection: the Board of Appeal therefore erred in law when, as regards France, it linked proof of use of the sign concerned to the requirement that the right concerned must have a significance which is not merely local.

The Court then reviewed the effect and significance of litigation between the same parties and concerning the same sign in various national jurisdictions. The Court considered that those decisions were not binding upon it and that It was not conclusive that Budvar had not been able to prevent Anheuser-Busch’s distributor from selling beer in France under the Bud trade mark since, under Article 8(4), the opposing party does not need to establish that he has in fact already been able to prohibit use of a subsequent mark, but only that he has such a right available to him.

Anheuser-Busch then appealed to the ECJ. Advocate General Cruz Villalón advised the ECJ to allow the appeal and remit the case to the General Court. Why? In particular he considered that (i) the requirement of ‘use in the course of trade’ in Article 8(4) is, like the other requirements in that provision, an independent concept which warrants its own interpretation; (ii) it is relevant to argue that an opponent relying on Article 8(4) has used the invoked sign as a trade mark rather than for the purpose of indicating the geographical origin of a product; (iii) for the purposes of Article 8(4) the use of the opponent’s sign must, where appropriate, be proved before the date of filing, rather than at any time up to the date of publication, of the opposed application for registration (iv) the judgment under appeal supplied an interpretation which was excessively literal and which adhered too closely to the wording of Article 8(4).

This morning the Court of Justice accepted the advice of the Advocate General, set aside the judgment of the (now) General Court which, it said, made three errors of law, and remitted the case for further consideration by that Court. The judgment has only just been posted on the Curia website and, at 221 paragraphs, will take some time to read, but the non-bindingpress release says:

" ... the General Court was incorrect in holding that it was sufficient, for the purpose of establishing that the sign ‘bud’ was of more than mere local significance, that the sign was protected in a number of States. The Court of Justice notes, in that regard, that, even if the geographical extent of the protection of the sign concerned is more than local, registration of a Community trade mark may be prevented only when the sign is actually used in a sufficiently significant manner in the course of trade in a substantial part of the territory in which it is protected. Use in the course of trade must also be assessed separately for each of the territories in which the sign is protected.

Next, ... the General Court also made an error in holding that the Regulation did not require the sign ‘bud’ to have been used in the territory in which it is protected and that use in a territory other than the territory of protection may be sufficient to prevent registration of a new trade mark, even where there is no use at all in the territory of protection. In that connection, ...it is only in the territory in which the sign protected, in its entirety or in a part of it, that the exclusive rights attached to the sign may enter into conflict with a Community trade mark.

Finally, ... in holding that it had to be shown only that the sign concerned was used in the course of trade before publication of the trade mark application and not, at the latest, as at the date of the application, the General Court made a further error of law. In view, in particular, of the considerable period of time which may elapse between the filing of an application and its publication, applying the test relating to the date of the application provides a better guarantee that the use claimed for the sign concerned is real and not an exercise whose sole aim has been to prevent registration of a new trade mark. Furthermore, as a general rule, where the sign concerned is used exclusively or to a large extent during the period between filing of the application for a Community trade mark and publication of the application, that will not be sufficient to establish that the use of the sign in the course of trade has been such as to prove that the sign is of sufficient significance.

The Court of Justice, while rejecting the other grounds of appeal raised by Anheuser-Busch, sets aside in part the judgment of the General Court in so far as the judgment makes the three errors of law thus found. Since the state of the proceedings does not permit final judgment to be given by the Court of Justice, the latter refers the case back to the General Court to give judgment afresh".

The IPKat was rather expecting this. Though he has a tendency to prefer the sort of literalism that the General Court employed, he believes that the ECJ's ruling is more in line with the legislative intent than was that of the inferior court. Merpel adds, the first of Anheuser-Busch's four applications was filed on 1 April 1996. It's almost 15 years to the day later, and we still have the prospect of a rehearing by the General Court which itself is subject to a possible -- and in the case of these two parties highly likely -- further appeal to the ECJ. Is there truly no better path to Community trade mark registration?

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